RIGHT TO FAIR COMPENSATION AND TRANSPARWENCY IN LAND ACQUISITION, REHABILITATION AND RESETTLEMENT ACT, 2013

Section 96

Exemption from income-tax - Compensation received in respect of award or agreement, which has been exempted from levy of income-tax vide section 96 - Amount whether taxable under Income Tax Act, 1961 -

Petitioner was aggrieved by notice of demand and assessment order on issue of receiving compensation claimed to be exempted under section 96 of Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. It was contended that same did not fall within mischief of section 54F of the IT Act, 1961. Case of petitioner was that as per Circular No.36/2016, dated 25-8-2016 if land is non-agricultural, it would not be taxable as per the provisions of the Income-tax Act, 1961. Held: There was force and merit in submissions. The language of section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, does not leave any doubt in the mind that if the land is either acquired or the result of an agreement, it could not fall within the mischief of IT Act. In other words, exemption is liable to be granted. CBDT vide Circular No.36/2016, dated 25-8-2016 came out with a clarification that compensation received in respect of award or agreement, which has been exempted from levy of income-tax vide section 96 of the RFCTLARR Act, shall also not be taxable under the provisions of IT Act, 1961, even if there is no specific provision of exemption for such compensation in the IT Act, 1961. Thus, assessment and demand notice was quashed.

REFERRED :

FAVOUR : In petitioner's favour.

A.Y. :

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